An incorrigible Cognitive Dissident

DEUTSCHE RESULTS: A stay of execution, not a reprieve

The general surge in bond-trading revenue has come to Deutsche Bank’s short-term rescue, but the 14% rise was dwarfed by the 40% achieved by Barclays. Everyone would do well to look again at what analysts were seeking in terms of reassurance yesterday.

“I am looking at three things in general, which are capital levels, overall progress on costs, and general execution on the core business,” said Stephen Ellis, director of financial services equity research at Morningstar. This was, in my estimation, a fairly typical opinion-leader view.

Anyone who has ever spent time involved in corporate financial accounting will testify to the ease with which obscure nomencalture, smoke, mirrors and downright misleading “income” levels can be used to advantage in order to explain any given quarter.

Other factors can’t be ignored: the bank is hastily selling its Mexico banking subsidiaries to Investabank and Institucion de Banca Multiple, while latin america dental has dumped DB as its APR1 partner. Across the world, Deutsche’s business partners are nervous.

To be fair to John Cryan, he has tried to control expectations, warning that the situation “will stay difficult for a while” and that DB must “brace itself” in readiness for the final DoJ fine demand. But ultimately, the doubts remain exactly the same: captilisation, controlling costs, and strategy in relation to core business.

Liquidity reserves are a worry to me. In June, they stood at $223 billion. In September, Cryan said they would steady at $215 billion. Today, the number is $200 billion.

Costs continue to be a concern to core investors. One such – unnamed – called on the bank’s management to make deeper cuts in its trading activities. “Fixed income is still oversized in terms of cost and on group level there are still 10,000 staff too many.”

But clarity of strategy is what I think lies at the centre of this affair. There is what the Americans would like Deutsche to do from the US geopolitical perspective; there is the Bundestag view that the Bank has grown too big for its boots; and there are the Arab investors waiting to get a result on the DoJ fine…but more to the point, wanting a clear steer from Cryan about where the future high margin income is going to come from.

I still doubt that Justice will give a final fine decision before Election Day. Deutsche management, potential investors, shareholders and Donald Trump will have to wait and see.

8 thoughts on “DEUTSCHE RESULTS: A stay of execution, not a reprieve”

firstly, the reports of Deutsche’s profits were actually published in the Mainstream Media.

After all, their role is to trash Deutsche’s reputation in the minds of the population at large, so it has to be admitted that these headlines come as something of a surprise. They didn’t have to publish them, did they? Makes you wonder….

But I would like to remind all readers that various British banks are still on life-support, still need infusions of cash – and are still addicted to gambling despite years of therapy.

The prognosis for their illness is not good: after all, an addiction to gambling on the stockmarket is not going to be helped by rock-bottom interest rates, cash injections and the absence of any regulation worth the paper it is printed on.

And we’re still banging on about how Deutsche is the bad guy.

Just remember where your taxes go… and it’s not into Deutsche’s pocket.

I would caution you about quoting from the Mainstream Media; after all, you know that your minders make you say things that you rather wouldn’t. It’s only Putin and other German speakers who you can really trust because your minders are too dumb to be able to speak German properly.

As to this ‘Kornet’ anti-tank missile, the Chinese have a very similar piece of equipment – and it is entirely possible that the Americans procured it and then gave it to ISIS.

Mind you, at the speed it was travelling in the video, it could have been an American tank-busting missile that was employed. After all, if it’s in the Mainstream Media, everybody’s going to believe it, aren’t they?

When it comes to retractions, nobody’s listening because they believe what they were told the first time.